The Sources of Business Cycles in a Low Income Country

Download or read book The Sources of Business Cycles in a Low Income Country written by Romain Houssa and published by International Monetary Fund. This book was released on 2015-02-25 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the role of global and domestic shocks in driving macroeconomic fluctuations for Ghana. We are able to study the impact of exogenous shocks including productivity, credit supply, and commodity price shocks. We identify the shocks with a combination of sign and recursive restrictions within Bayesian VAR models. As a benchmark we provide results for South Africa to document the difference between two economies with similar structures but different levels of development. We find that global shocks play a more dominant role in South Africa than in Ghana. These shocks operate through three channels: trade, credit and commodity prices.